Weekly Wrap

Fitzroys Weekly Wrap - 26th April 2024

Posted on 26th April 2024

17 Toorak Road, South Yarra
The retail building, occupied by La Parisienne Café and Charcuterie and on a 150sqm site, sold for $2.16 million, on a 3.7% yield.

1007-1009 Plenty Road & 2a Clunes Street, Kingsbury

A land banker bought the 1,730sqm site for $4,050,000. Car wash and café operator Magic has 2 years remaining on its lease.

104 Fletcher Street, Essendon

The 2-level 277sqm building on a 215sqm site home to café Assembly Ground sold for $2.24 million. It has a 5-year lease with a further 20 years of options, currently returning $88,167pa plus outgoings.

43 Derby Street, Collingwood
The 180sqm building on a 150sqm site sold with a short-term lease for $1.76 million.

666 Whitehorse Road, Mitcham
An owner-occupier bought the 407sqm office, showroom and warehouse building, on a Commercial 2-zoned 1,324sqm corner site, for $2.41 million. The property has just over 1 year remaining on a 2-year lease.

8/8-10 Monomeeth Drive, Mitcham

The 170sqm warehouse unit with a 38sqm mezzanine office sold for $885,000.

Unit 19, 8 Kearney Street, Bayswater

A local investor bought the 267sqm office and warehouse with 5 car spaces for $725,000. It returns $36,225pa plus outgoings and GST.

Unit 5C (Lot 23)/36 Hume Road, Laverton North

The 102sqm warehouse unit with a first-floor office was leased at $26,000pa.

215 New Street, Brighton
The Buxton Group acquired the 4,670sqm Marine Hotel site for $22.65 million. The Marine Hotel closed last year.

8 Llaneast Street, Armadale

Telstra offloaded its 1,111sqm former exchange and Australia Post building site to developer Up Property for nearly $7 million, with a 3-year leaseback.

80 Camberwell Road, Hawthorn East

A land banker bought the 1,345sqm Telstra exchange site for $6.3 million, with a 3-year leaseback to the major telco.

1325 Plenty Road, Mernda
Happy Sprouts learning leased the former Mernda Primary site, being redeveloped by VAG Project Management into a 127-place childcare centre, for 15 years at $531,200pa.

Hospitality, Food and Beverage, and Entertainment Drive Down Melbourne CBD Retail vacancies
Retail vacancies across the Melbourne CBD’s key shopping and hospitality precincts nearly halved over the past 12 months, driven by the ongoing momentum in the hospitality, food and beverage and entertainment sectors, with several new deals struck by Fitzroys.

According to Fitzroys’ latest Walk the CBD report, retail vacancies in the CBD came down to 8.7% across its key retail precincts, from 15.5% a year earlier, as the proportion of hospitality, food and beverage and entertainment tenants in the CBD jumped from 34.1% to 40.9% of all surveyed spaces.

“The Melbourne CBD continues to undergo a post-COVID period of renewal,” said Fitzroys Division Director – Agency, James Lockwood.

“The momentum in the hospitality and food and beverage sector has continued on from the initial stages of the pandemic recovery, which saw a record-breaking number of hospitality and entertainment venues open up across the City of Melbourne.”

“The recession of the 1990s was followed by innovation across the CBD, and we’re now seeing a similar pattern of new hospitality venues opening, laneways being activated and inner-city living taking off again.”

Lockwood and Fitzroys Agency Executive Franklin Gikas have just struck several key deals.

Among the headlining deals is their lease of 758sqm across the ground and first floors of 360 Bourke Street to Unko Museum – also known as the “Cute Poop Museum” – bringing the hugely successful Kawaii Poop Experience from Japan. The deal was struck at $370,000 per annum.

The delightful interactive exhibit is adorned with adorable and colourful Kawaii décor, and installations, displays, and immersive attractions revolve around the theme of “adorable poop”. It arrives in Melbourne after a successful tour through Japan, visiting cities including Tokyo, Hiroshima and Shizuoka.

At 136 Exhibition Street, a joint venture between Red Rock Leisure Group (Cookie, The Toff) and renowned chef Michael Lambie (ex-Lucy Liu, The Smith) has taken 488sqm in a massive 10-year deal at $400,000 per annum, with the concept for a contemporary Asian fusion restaurant and bar.

“This part of Exhibition Street has seen a huge transformation in the past 18 months and has effectively connected several hospitality precincts, from Flinders Lane, and up through Bourke Street and Little Bourke Street,” Lockwood said.

At GPT’s transformed Queen & Collins building, Lockwood and Gikas have struck 2 new deals. Remo Nicolini’s A25 Pizzeria will open up its new “Centro” CBD store in a 5-year deal over 118sqm at $115,000 per annum.

Also at Queen & Collins, Franklin and Gikas leased 142sqm to Vivienne and Ron, the team behind Franklin Street’s Ichigo, who have over 10 years’ experience in the hospitality industry and are looking to open a new French/Japanese fusion concept restaurant. The 8-year deal was struck at $120,000 per annum.

They also run specialty dessert bar HongKongBoi, which slings new-wave Asian-hybrid gelato desserts.

“These are great votes of confidence in the CBD from quality operators who have witnessed first-hand the city’s post-pandemic recovery, and want to be a part of it going forward.

“These hospitality deals were struck with secure long-term commitments. Operators have seen the shift in balance of the CBD towards a lifestyle playground and are confident in its viability.”

Other new hospitality leases include at 121 Exhibition Street where Dumpling Kingdom will open its second store in the CBD, following on from its popular spot on Southern Cross Lane. The 71sqm space was leased for 5 years at $80,000 per annum.

These deals follow a string of hospitality leases struck by Fitzroys towards the end of the Walk the CBD reporting period. Headlining those was the lease of the 3-level former Shakespeare Hotel building at 167 Exhibition to an all-star Filipino hospitality crew with that will set up Askal, a contemporary restaurant and bar concept serving exciting Filipino and South East Asian-inspired food alongside bespoke cocktails and a diverse wine list. The crew’s collective experience extends to Rockpool kitchens, Chris Lucas’ stable of restaurants, and hatted venues.

Rare Permitted 10-Storey Development Site In Surging Melbourne CBD Fringe Precinct
A recently rezoned site in one of Australia’s most in-demand precincts has come to the market with a new permit for a 10-storey commercial development.

Fitzroys’ Shane Mills and Chris Kombi are marketing 358-360 Swan Street, Richmond for sale via Expressions of Interest closing Thursday, 9th May at 3pm.

Located just 3 kilometres from the Melbourne CBD and recently rezoned to Commercial 1, the 491sqm site is currently improved by a single-storey 430sqm showroom building and is being offered with vacant possession.

The newly approved planning permit received from the City of Yarra comprises a 10-level commercial building with basement and ground floor car and bicycle parking, ground floor retail and café area, and nine levels of office space, with a total net lettable area of 3,043sqm.

“This offers a rare permitted site in one of Melbourne’s most valuable and in-demand commercial and residential precincts,” Kombi said.

“More Melburnians are looking for highly accessible locations close to high-quality retail, hospitality and lifestyle amenity to live, work and play at a time of flexible work arrangements.

“The Richmond and Cremorne office market is arguably the hottest city fringe market in the country, situated around the Swan Street retail and lifestyle precinct that is among Melbourne’s most vibrant throughout both day and night.”

Commercial occupiers in and around the area include Carsales, Seek, Disney, Tesla, NDIS, MYOB, Adidas, Red Energy, Reece, 7-Eleven, Uber, Mattel, REA Group and 2XU, while east along Swan Street, Australia Post’s new Melbourne headquarters is under-construction as part of a $460 million, 35,000sqm new office and community precinct at the corner of Burnley Street that will elevate the existing amenity and compliment the nearby Botanicca Office Park which is home to David Jones, GE and Country Road.

“The Richmond and Cremorne market, Melbourne’s own ‘Silicone Valley’. continues to attract businesses ranging from brand-new start-ups and tech firms to major companies,” Kombi said.

“There is clear ongoing demand from businesses for office space of all sizes in this market, as evidenced by the take-up number of commercial projects in the area and persistently low vacancies compared with the rest of Melbourne. These factors are also contributing to strong rental growth prospects.”

Mills said, “Swan Street offers a plethora of international, national and local retailers and supermarkets together with a lively restaurant, café and bar culture, home to Melbourne institutions such as The Corner, easily accessible by tram and train and moments from Melbourne’s world-famous sporting precinct, which includes the MCG, AAMI Park and Rod Laver Arena”.

Teneketzis said the property is a short distance to both East Richmond and Burnley train stations, with trams running along Swan Street and along nearby Church Street, further enhancing its accessibility and amenity.

“The property’s proximity to the Melbourne CBD and major transport links such as the Monash Freeway and Punt Road also make it an attractive proposition for businesses seeking exposure and an accessible location."

Disclosure: The weekly Fitzroys Property Wrap is for information only on transactions in the Melbourne property market. Fitzroys provides this information as a public service. We are not purporting that all sales and leases within this report were transacted by Fitzroys. Terms/Privacy © Copyright 2023 Fitzroys.